Cotton farmers in Uganda opposes indicative price, demand a fair rate

Farmers in Uganda have opposed the sh1,000 indicative price set by the Cotton Development Organisation (CDO) and are demanding that they deserve a fair price this season. They have always looked forward to having an indicative price for cotton set which can save them from unscrupulous middle-men, who take advantage of their ignorance to exploit them.

The CDO, on 5 January had announced an indicative price of sh1,000 for a kilogramme of seed cotton this harvest season. This implies that cotton buyers will not be allowed to purchase below the indicative price because this would be in contempt of rules and regulations governing the cotton industry.

The indicative price, however, did not enthuse farmers’ expectations in the Kazinga Channel cotton growing belt. They argued that the price was too low and that the proceeds may not be enough to pay back the loans incurred during the production process.

Farmers have proposed that the indicative price be increased to sh2,000 to enable farmers meet all the expenditures they make during the production process.

Farmers also said that buyers always insist on paying the minimum price. The indicative price for a kilogramme of seed cotton should have been set at sh1,500. Most farmers depend on borrowed money from Microfinance institutions and Savings and Credit Cooperative Societies (SACCOS). And with sh1,000 per kilogramme, they may not realise enough margin to repay loans.

CDO executive director Jolly Sabune, however, told media that sh1,000 is just a guiding price in the face of falling international cotton prices. He urged farmers not to accept lower prices, but negotiate for a higher rate.

CDO do not buy cotton, but is are required under the Cotton Development Act to protect farmers by putting a limit to the lowest price they can be paid, so that unscrupulous middle-men do not cheat them.

However, according to reports, a kilogramme of cotton on the international market is at US$1.5 (about sh4,000). However, it is also noted that Uganda’s indicative price is slightly lower than Tanzania’s indicative price of sh1,162 for this season.

Uganda produced 78,364 bales of cotton in 2013/14 compared to the 102,619 bales in 2012/13.